The first estimates of June quarter GDP are out and UBS expects GDP to contract by -12% in the Jun-21 quarter. This will be a stark contrast to the positive growth cues that India has seen in Q3 and Q4 of FY20. The Indian economy had contracted overall by -7.3% and this contraction in Q1 could be worrisome as it comes on a much lower base. Although the high frequency indicators are beginning to turn around in June, it may be too late to undo the damage of COVID 2.0. UBS expects Sep-21 quarter to be a lot better.
The woes of Adani group continued as the group lost market value of Rs.159,000 crore, or $22 billion, in a single week. The sharp fall was evident across all the Adani group stocks and the lofty valuations only made the fall sharper. The six listed stocks of the Adani group are down between 8% and 22% in the week. The fall was triggered after reports of an NSDL freeze on select FPI accounts with exposure of Rs.43,500 crore to Adani group. Despite clarifications from NSDL and the Adani group, stocks failed to bounce back.
Global ecommerce giants, Flipkart and Amazon, filed separate appeals before a Bench of Karnataka High Court, challenging the order allowing CCI to restart probe into anti-competitive behaviour by Flipkart and Amazon. Flipkart has filed a fresh appeal asking the probe to be put on hold. Only last week, the High Court had dismissed petitions by Amazon and Flipkart regarding CCI continuing its probe. Not surprisingly, the CAIT has been accusing ecommerce giants of mala fide practices, to the detriment of small merchants.
PharmEasy, the online medical store, is reported to be in talks to acquire diagnostics chain, Thyrocare, in a deal worth Rs.7,000 crore, or close to $1 billion. Thyrocare, promoted by Dr. Velumani, has been a marquee pioneer in diagnostic testing in India. However, it is reported that the absence of any succession plan may have coaxed Thyrocare into this decision. Currently, the promoters hold 66.14% in Thyrocare and as part of the deal Dr. Velumani could take a stake in API Holdings. Thyrocare was listed in year 2016.
Ultra-high net worth investors or UHNIs are going aggressive on tech start-ups. It is estimated that Indian UHNIs may invest $30 billion in tech start-ups by 2025, as per Praxis Global Alliance. The report suggested that the number of unicorns in India by 2025 could increase from the current 56 to 95. India currently has around 10,000 UHNIs with a combined wealth likely to scale $700 billion by the year 2024. UHNIs in India are defined as families with a net worth of over $30 million and have deep pockets and high risk appetite.
India’s digital pioneer, Paytm, hired four banks including JPMorgan and Goldman Sachs for its proposed IPO. In addition, ICICI Securities and Morgan Stanley will also help with the sale. Paytm plans to raise close to $3 billion or Rs.21,800 crore via IPO in the year 2021. This would make Paytm India’s largest IPO, bigger than Coal India in 2010. In early June, Paytm investors like Softbank, Berkshire and Ant Group had asked its employees if they wanted sell stock in the public offering. The IPO is expected around December 2021.
Shareholders of Jet Airways refused to approve financial results for FY20 and FY19, ahead of the decision by the bankruptcy court on the Jet revival plan. Shareholders voted against approving financial accounts of both years. Out of 15,900 shareholders who voted at the AGM, nearly 95% voted against approving the financial results of both years. Naresh Goyal and the promoter group did not vote at the AGM. Jet Airways had suspended operations in Apr-19 after running out of funds. Availability of slots remains a major issue.
Hyderabad based Natco Pharma saw net profits falling by 43% to Rs.53 crore for the Mar-21 quarter on lag effect of the pandemic. For the fourth quarter, the total revenues were also down at Rs.360 crore compared to Rs.477 crore in the corresponding quarter last year. However, full year consolidated net profits were stable and revenues for FY21 were higher than FY20. Natco is making some high value launches in the US. It expects a rebound in domestic formulations, APIs and the Crop Health business.